Grassley Describes Sanctions Impact of Inaction in Trade Dispute
WASHINGTON – Sen. Chuck Grassley, chairman of the Committee on Finance, is urging members of Congress to study the list of U.S. products targeted for increasing tariffs as Congress fails to enact legislation ending a trade dispute with Europe.
“Some people might write off the tariffs as small change right now,” Grassley said. “Well,the tariffs aren’t small change if your livelihood depends on exports, and Europe is jamming up yourexports because certain U.S. senators are using the urgency of passing this bill to try to scoreunrelated political points. Remember, the tariffs are only going up. Every month of stalling meansmore jobs in danger in the United States.”
In a Senate floor speech this week, Grassley described some of the products facing European sanctions because despite his longtime efforts, Congress has not yet enacted legislation to repeal the current Foreign Sales Corporation-Extraterritorial Income tax regime. Europe is retaliating againstthe current regime, which the World Trade Organization has ruled unacceptable. Grassey’s bill, theJumpstart Our Business Strength (JOBS) Act, would replace the current regime and bring the UnitedStates into compliance with its international trade obligations. The bill is stalled in the Senatebecause certain Democratic senators so far have refused to stop slowing progress by offeringunrelated amendments designed to score political points.
The bill eliminates the FSC-ETI corporate tax regime and replaces it with an effective 3percent tax cut for manufacturing income to preserve and create manufacturing jobs in the UnitedStates. It also reforms international tax rules that seriously undermine America’s ability to competein the global marketplace. For example, the bill cleans up problems that cause foreign earnings tobe double taxed by both the United States and the foreign country where the profits are earned. TheFinance Committee passed the bill on Oct. 1, 2003, on a 19 to 2 vote. All committee Democratsvoted in favor of Grassley’s bill.
Following are Grassley’s floor speech on products facing sanctions and some of the stateswhere those products are made; and a list of targeted products.
Floor Remarks, Wednesday, March 24, 2004
Mr. President. Mr. Grassley: prior to our cloture vote on the FSC-ETI bill, I read a list ofsome products that if they are going to be shipped out of the United States and exported to Europe,are going to have, right now, five percent tariffs added to them. Five percent tariffs added to thembecause of European retaliation against the United States because we haven’t passed this legislationyet, and that is going to cause jobs to be lost. And that tariff is going to go up over the course of thenext 12 months, a percent a month to 17 percent.
I would like to be just a little bit more specific in how some of those products and themanufacturers of those products or the producers of those products will be affected. In jewelrymanufacturing, we would have $2 billion in annual exports being jeopardized; 95 percent of jewelrymanufacturers are small businesses. So, there is obviously a huge potential impact on jobs in thejewelry industry. Folks like Stamper Black Hills Gold in South Dakota are targeted, just as oneexample of jewelry manufacturing. Racehorses are also being targeted. The average value of U.S.exports of racehorses is about $100,000. At five percent, that’s an extra $5,000 cost to our exports.
By the end of the year it will be an extra $14,000 on average; and for high-value horses, it will beseveral times more. These sanctions would impact states like New York, California, Florida, andMaryland. In the area of dairy, we will have sanctions on cheese exports impacting states likeWisconsin, and Vermont. For fruits and vegetables, such as citrus fruits and peppers, California isaffected. Florida is hurt as well, with tomatoes for another example. I could go on and on, but Ithink I will put in the Congressional Record a list that is beyond what I have just referred to. But wehave over 500 tariff lines that have been targeted, already with sanctions on them.
Next Article Previous Article
- CBO: Extending Increased Unemployment Benefits Weakens Economy, Increases Unemployment in the Long-Run as Benefits Exceed Wages for Most
- IRS Failed to Collect $47+ Billion in Taxes from High-Income Individuals during Obama Admin
- Grassley Joins Bipartisan House and Senate Committee Leaders in Urging HHS to Disperse COVID-19 Relief Funds to Medicaid Providers
- Grassley at Hearing on Foreign Drug Manufacturing Inspection Oversight
- Grassley, Wyden Statement on USTR Investigation of Digital Services Taxes